A Short Guide to Popular Cryptocurrencies

IQ.Option

For most people who have recently joined the market all cryptocurrencies appear to be the same, yet this misconception is far from reality. The cryptocurrency market, no matter growing or contracting, provides numerous trading opportunities to the people with deep understanding of the phenomenon.

By understanding the technology and the reasoning behind Bitcoin and its most popular peers, traders do get a chance to predict future price movements and get an insight into the behavior of the market. After all, cryptocurrencies are here to stay, in one form or another and it is always beneficial to know how the financial market operates.

Bitcoin

Bitcoin is the world’s first and by far the largest cryptocurrency. It was released as a part of a blockchain experiment back in 2009. Bitcoin allows for peer-to-peer transactions with the help of distributed ledger technology known as blockchain. Bitcoin operates as a decentralized network and is not controlled by any of the central authorities. The only ‘body’ capable of implementing important technical decisions is the majority of BTC holders. Despite the recent plunge, Bitcoin is still the king of cryptocurrencies, dominating the market with an over 48% share.

Litecoin

Developed as an alternative to Bitcoin, Litecoin saw the world in 2011. It is in many aspects identical to Bitcoin but still can boast several technical improvements. Due to technological imperfections and a high cost, Bitcoin is mostly used as a store of value.

Litecoin in turn is more suited to day-to-day financial transactions due to greater number of simultaneous transactions, close to zero fees and faster transactions. Litecoin is currently the world’s fifth-largest coin by market capitalization.

Ripple

Ripple is different from the rest of the crypto market by being a global settlement network for other commodities (fiat currencies, Bitcoin and altcoins), not exactly a cryptocurrency. In order to complete a settlement, however, a small fee should be paid in Ripple tokens. The latter are then traded on the market. Ripple was created with the purpose of sustaining instant, secure and nearly free global transactions. Founded by a single company, the Ripple network nonetheless does not require the enterprise to exist in order to function properly. Ripple is being used by huge international banks like UniCredit and UBS. This fact definitely adds credibility to the coin.

Ethereum

Ethereum is more than just a cryptocurrency, it is an open-source public platform with smart-contracts functionality. When you want your money transferred automatically under a set of certain conditions, smart contracts are here to help. The feature can be used to avoid the involvement of third-party mediators. Several global companies with established names that operate as intermediaries may be gone should the smart contracts catch up. Decentralized platforms can, therefore, drive down transaction costs and eliminate single points of failure and control.

Ethereum looks so promising certain experts tend to believe it will surpass its biggest rival, Bitcoin, at one point or another. Yet, this moment is probably still far away.

Ethereum Classic

Ethereum Classic is a product of the Ethereum hard fork. It appeared as a result of disagreement with the Ethereum Foundation regarding the DAO hard fork. As with any cryptocurrency, technically critical updates have to be approved by the majority of holders. In case of Ethereum, a group of community members rejected the hard fork, thus creating a separate coin named Ethereum Classic. The latter is close in its design and functionality to the original Ethereum tokens, yet represents the original and ‘unchanged’ version of Ether tokens.

Dash

Dash, that also aims to improve the functionality of Bitcoin, is doing so by addressing the problems of low transaction speed and insufficient anonymity. It is built on a two-tier system with miners and master-nodes. While the former are responsible for its basic functionality, the latter do provide the system with additional features like near-instant transactions and better privacy protection. The features can eventually make Dash one of the cryptocurrency leaders, especially when considering the ever-growing number of cryptocurrency transactions.

Source: Medium

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